The paper estimates the gains from takeover in a sample of Swedish public- tender offers and analyses its division between target and bidder shareholders. It finds that target and bidder shareholders collectively gain 6% in merger bids and 3% in minority buyouts, and that target shareholders...

When a firm is close to bankrupcy, equity-holders may `blackmail' owners of bonds by paying less than the originally-contracted coupon payments. This paper develops simple, closed-form expressions for bond and equity values when such blackmail effects are present. Furthermore, we show that...

One of the main decisions facing firms is that of a choice of a capital structure, and in particular the choice of debt versus equity. Models where capital structure matters have focused either on the incentive approach, where agency problems stemming from the separation between ownership and...

We model a two-asset economy populated by `speculators', who are always present in the market, and `noise traders', who infrequently reallocate their portfolios in a discrete fashion. Noise traders' markets orders are filled at prices which support the speculators' equilibrium consumption path,...

The standard approach to modelling primary commodity markets under rational expectations is to relate the commodity price to the production and consumption `surprises' (i.e. the innovations on the equations). Using the world aluminium market, I show how this approach can be modified so that both...

Investors can achieve international diversification in their portfolios not only through purchasing foreign equity directly but also through investing in domestic firms which then invest abroad. Yet these alternative approaches are taxed very differently. A number of countries have also imposed...

This paper examines executive turnover -- both for management and supervisory boards -- and its relation to firm performance in the largest companies in Germany in the 1980s. Turnover of the management board increases significantly with poor stock performance and particularly poor (i.e....

This paper, focusing on the UK insolvency code, shows how the efficiency of reorganization is affected by the distribution of control rights. Control rights raise particular problems when creditors have different incentives to keep the firm as a going concern. Such differences may arise from the...

In this paper we construct a model of a multinational firm with flexibility in sourcing its production and with the ability to use financial markets to hedge exchange rate risk. The firm's need for hedging is directly related to the degree of flexibility, and the production plan it chooses is a...

Shareholders are attributed a residual right to use information on corporate prospects, which is produced within the firm. The firm allocates these rights to the highest bidder on behalf of shareholders. It is argued that this allocation is the natural benchmark for assessing the impact of...